Merck names Ken Frazier as its next CEO

Years before Kenneth Frazier became an in-house attorney at the pharmaceutical giant Merck, he volunteered to help an Alabama man facing execution for a murder he said he did not commit.

James "Bo" Cochran had already served 19 years in prison.

"I am not going to let him die," Frazier reportedly told the executive director of the advocacy group Equal Justice Intiative after meeting the prisoner.

An African American, Cochran was acquitted of killing a white grocery store manager after Frazier and his team of lawyers attacked the prosecution’s weak case and proved the first jury had been illegally selected.

Frazier, who was named Merck’s next chief executive today, is known in the pharmaceutical industry for the same fierce combination of determination and passion that freed Cochran.

When he succeeds CEO Richard Clark at the start of the new year, he will be the first African-American to lead a major U.S. drug maker, according to Marcus Oaks, publisher of Black Health Magazine. Clark, who will reach Merck’s mandatory retirement age of 65 next year, will remain chairman of the Whitehouse Station-based company.

However, Frazier faces the daunting task of overseeing a company in transition as it continues to merge Schering-Plough into its operations. At the same time, he has to ensure the company continues to push out new medicines and build its business in new markets.

Observers say he is up to the job.

"Determination plus intelligence equals drive,’’ said Oaks, who included Frazier on his magazine’s list of the 25 most influential African Americans. "He has that kind of drive.’’

Frazier, who is now 55, arrived at Merck in 1992 as vice president and general counsel of Astra Merck, a joint venture of drugmaker AstraZeneca and Merck. In 1999, he was named senior vice president and general counsel at Merck, which gave him responsibility for the company’s legal and public affairs departments.

When Merck decided to withdraw its widely used pain relieving medicine Vioxx in 2004, it triggered a wave of lawsuits against the company. From Wall Street’s perspective, Vioxx was nothing short of a crisis.

Frazier became the strategist calling the shots, initially deciding to defend the company against thousands of lawsuits and eventually helping to structure a $4.85 billion settlement to resolve the remaining lawsuits.

Wall Street had expected that Merck would have to pay even more. "He managed the Vioxx litigation extraordinarily well, and there were a lot of doubting Thomases, especially on Wall Street," said Barbara Ryan, an analyst who follows drug companies for Deutsche Bank.

"Vioxx clearly elevated him into the board room and into senior management discussions on a fairly consistent basis,’’ said Charles "Tony’’ Butler, an analyst with Barclay Capital.

Richard Clark, Merck’s current chief executive, said Frazier demonstrated his leadership skills as he helped to carry out the merger of Merck and Schering Plough this year.

"Ken spent time in the field understanding the customer needs of our markets in a way that I hadn’t seen done before,’’ Clark said. "It showed you his dedication and enthusiasm.’’

Frazier, who is almost universally described as intelligent, passionate and down-to-earth, has experienced three years of grooming under Clark. "He knows the organization very, very well,’’ Butler said.

"He doesn’t have a cake walk,’’ Butler said. "He faces a tougher regulatory environment and a tougher commercial environment. He has to be an internal and external cheerleader and a magnet for talent.’’

Myrtle Potter, a former pharmaceutical executive who has known Frazier for about 15 years, said he has the ability to foster the kind of innovation the industry needs to sustain itself. Potter now runs a healthcare advisory firm, Myrtle Potter & Company in the Silicon Valley.

"He has the strategic breadth and depth to help drive innovation,’’ Potter said. "He has the true ability to help the entire sector.’’

FRAZIER'S BACKGROUND

Early days: law partner, Drinker, Biddle & Reath, Philadelphia

Career move: In 1992, he became president, general counsel and secretary of Astra Merck Group, a joint venture between Astra Zeneca and Merck.

Career highlights: In 1999, he was named senior vice president and general counsel, with responsibility for overseeing Merck’s legal and public affairs departments and the Merck Company Foundation. He has served as executive vice president and president of Merck’s global human health since 2007.

Spare time: founding board member of Cornerstone Christian Academy, a private elementary school in Philadelphia

Biggest challenge: Winning the release of a man from death row.
On success: “The reason I’m successful is because of mentors like Dick Clark. That’s how people become successful because people reach back and help them along.’’
Source: Penn State University, Star-Ledger reporting

Merck & Co.

Headquarters: Whitehouse Station, part of Readington Township

What Frazier will lead: The second largest pharmaceutical company in the world, with $27.4 billion in annual sales.

Global reach: Doing business in more than 140 countries.
Employees: 100,000 worldwide, 42,000 in the U.S. and roughly 14,000 in New Jersey.
Milestone: It spent $41.1 billion to acquire rival drug maker Schering-Plough last year, a mega merger that gave the company new medicines such as Remicaid for arthritis and a variety of top-selling consumer products such as Dr. Scholl’s foot powders and Coopertone suncare lotions.

Medicines: Januvia for diabetes, the Gardasil vaccine for prevention of cervical cancer, the cholesterol-fighters Vytorin and Zetia.

Frazier’s focus: As president, he has led Merck’s efforts to increase business in the growing markets of India, China and Brazil and Russia. “The pillar of our strategy will remain innovation,’’ he told Bloomberg. “Emerging markets is a subset of that innovation strategy."